$5 Billion Error Made By Bank Once Derided As 'Germany's Dumbest'
One of Germany's largest banks mistakenly sent more than $5 billion to other banks, according to German media. It's not the first stumble for state-owned development bank KfW, which famously sent hundreds of millions of dollars to Lehman Brothers on the same day the U.S. bank filed for bankruptcy.
The most recent error took place in February and was flagged by Germany's central Bundesbank, according to business newspaper Handelsblatt.
In an emailed statement, KfW — full name: Kreditanstalt für Wiederaufbau — told German media that it recovered the money that it had transferred by mistake. The bank says the problem was due to human error, as a computer programming mistake prompted the bank's automated payment system to repeat transfers to four banks multiple times.
The bank says it's investigating the mistake to ensure it won't be repeated.
The scale of the error prompted Deutsche Welle to resurrect the title of "Germany's dumbest bank" to describe KfW. That's the label that was first applied to the bank by the tabloid Bild, when it erroneously sent Lehman Brothers more than $300 million in 2008.
Despite its unflattering nickname, KfW currently reigns as the World's Safest Bank, according to Global Finance magazine, which has ranked the bank in its top spot for five years running.
In September, KfW reported having balance sheet volume of half a trillion euros and a before-tax profit of more than $2 billion, according to Bild.
Other banks have also made billion-dollar mistakes. As Deutsche Welle reports, "In 2015, Deutsche Bank managed to make an erroneous payment of nearly $6 billion to a hedge fund. The money was returned the next day."
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